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Re[2]: [ga] Date: Wed, 9 Jan 2002 15:53:53 -0500

Thanks, Elliot.  I, too, need to clarify a point or two, plus
elaborate a bit.

1. With regard to the WLS proposal, we do agree that there is no
compellingly urgent reason to implement it, the counter-proposal or
any other plan which addresses the after-market. There are other, more
pressing, tasks which require more expedient attention and focus. We
also generally agree upon the order of the priorities which you

2. With regard to the Registrars and others which currently compete in
the after-market and, more specifically, to address your latest
comments, I think that we are in partial agreement.

I think that it behooves the Registry and all current and potential
after-market participants to collaborate with the Registry in an
effort to introduce more efficiency into the systems and procedures
relative to capturing dropped/deleted domain names and efficiently
coping with market demand for all domain names.

A part of this process should be, IMHO, the adoption of specifications
or policy, with regard to expired and deleted names, which is only
mentioned in 3.7.5 of the RAA, but does not currently exist.

3. With regard to potential abuse in relation to expired, but not
deleted, domain names, I have pasted 3.7.5 of the RAA below:

        3.7.5 Registrar shall register Registered Names to Registered
        Name Holders only for fixed periods. At the conclusion of the
        registration period, failure by or on behalf of the Registered
        Name Holder to pay a renewal fee within the time specified in
        a second notice or reminder shall, in the absence of
        extenuating circumstances, result in cancellation of the
        registration. In the event that ICANN adopts a specification
        or policy concerning procedures for handling expiration of
        registrations, Registrar shall abide by that specification or

Absent of the specification or policy, mentioned in the foregoing, it
appears to me, anyway, that there is an opportunity for a Registrar to
do just about anything they choose. If the Registry's agreement is
similar in structure (I haven't researched it) then, these comments
also apply to the Registry's agreement.

Currently, I think there exists an opportunity for a Registrar to give
preferential treatment to a third party during the grace period, since
there is no controlling specification or policy. Further, it is my
understanding, although I admit to not fully reading and digesting the
RAA, that there is also nothing which prohibits the hoarding of domain
names after the 45 day grace period.

The only point I am attempting to make is that only the previous
Registrant of the expired domain name should be allowed to renew the
name during the grace period (no opportunity for preferential
treatment for a third party, back-room deals or other abusive schemes)
and that expired names be uniformly dropped at the conclusion of the
grace period -- to afford ample protection to the previous Registrant
and to ensure that all parties can compete in the after-market on a
fair and even basis.

4. We disagree when it comes to pricing, marketing and business plans
relative to the participants in the after-market. Basically, I am
against anything that thwarts open competition.

In my view, the plans presented generally tend to move this market
segment into a controlled structure, under the auspices of only the
Registry, the Registrars or both of them. Further, these plans tend to
not only thwart healthy competition but also to eliminate some of the
current competitors from this market segment.

It is my contention that the name space belongs to the public - not
the Registrars, the Registry, ICANN or anyone else involved in the
registration channel. Therefore, none of the foregoing parties have
any rights to any domain name, regardless of its current status,
unless they are the Registrant of that name. The one and only thing
which confers any rights to a domain name is its registration and that
registration is, essentially, on the basis of FCFS (let's forego a
discussion about TMs since we all know about it and it will only muddy
the water).

It is also my contention that, most fundamentally, it is the potential
Registrants which drive the market for domain names, regardless of
whether they be new names to be registered for the first time or the
registration of a name which was previously registered and then

In my view, the profit potential of the after-market was brought into
the spotlight due to the Registry's inability to cope with the demand.
Now that there is a band-aid on the Registry's system, (in recognition
of your comments, Elliot, that more needs to be done), the attention
has turned away from the systems and procedural infrastructure, to a
focus on proposals and ideas about how to best control this market
segment and how to essentially monopolize it in one sense or another.
I submit that these discussions and proposals have all been
anti-competitive, contrary to free enterprise and, thus, misplaced.
Moreover, they fly in the face of, and are diametrically opposite to,
the very reason that, today, there is an ICANN and competing

I just don't see any compelling reason to handle the after-market any
differently at the Registry' or Registrars' level, except, perhaps, in
the areas of systems and procedural efficiency and the adoption of the
specification and policy, mentioned in 3.7.5, to reduce the potential
for abuse. It is, in my view, the responsibility of the Registry and
the Registrars to have stable systems in place to handle the demand
for domain names, regardless of how that demand may evolve or be
shaped by the consumer and regardless of the demand being in
connection with new name registrations or in connection with deletes.

I strongly oppose any scheme to essentially monopolize any segment of
the name space and any scheme which otherwise thwarts competition.
Thus, I think it would be much better, instead, for the Registry and
the Registrars to focus on the efficient delivery of domain names
including efficiently coping with the demand, regardless of how the
demand may evolve. Moreover, it is the consumers who will ultimately
decide upon the best business model, provided, that is, that
misdirected, greed does not replace the consumer's right to make that

The after-market is, fundamentally, the result of consumer demand and
that demand has resulted in the free enterprise innovation of several
companies to fill that need, albeit in a variety of different ways.
Further, this is currently an open market, in which anyone may enter
and compete. Frankly, but tempered by my prior comments concerning
potential abuse, I just can't find anything wrong with that.

Wednesday, January 09, 2002, 10:13:28 PM, Elliot Noss <enoss@tucows.com> wrote:

EN> Good comments Don. I will deal with the last three first, as they are easy.

EN> We will continue to work diligently on the transfer issue. We hope to see
EN> the release of the last "missing" names soon. The number was recently put by
EN> Verisign publicly as "two or three million". As for registrars rights in the
EN> grace period, we think this issue is covered by 3.7.5 of the RAA which
EN> creates a positive obligation on the registrar to release names absent
EN> policy not to. This is not 100% clear, but appears to be the case.

EN> The two points you first make are not so clear. I was not saying that
EN> nothing is wrong in the current process around expired names. There is alot
EN> wrong. The point I was making was that the current solution was working
EN> sufficiently such that it was no longer slowing down our business and those
EN> of our customers during the business day or otherwise. This was previously a
EN> crisis situation first at 6 am est, then moving to 2 pm est on many business
EN> days. This has been alleviated.

EN> To me, the current market situation with expired names borders on perverse.
EN> Names drop in batches rather than real time. A few (primarily one) registrar
EN> drops names with no discernable pattern (ie seemingly at random rather than
EN> at a set number of days). There is no easily accessable public information
EN> regarding names dropping. These and other inefficiencies combine with
EN> flat-pricing to create a situation where registrars "rent" their rights as
EN> registrars, run inefficient limited auctions not for names, but for the
EN> amount of facilities used to pursue names, and other "innovations". I do not
EN> begrudge anyone their practices in this regard. They are simply reacting to
EN> other inefficiencies in the market.

EN> In summary, there is, IMHO, something to fix.

EN> As to the second point, what I suggest to do is more to deregulate the
EN> price, not regulate it. It is currently regulated. Any proposal that moves
EN> to variable pricing is by definition moving from a fixed price regulated by
EN> someone, in this case ICANN. I am suggesting a regulated fee in the context
EN> of a variable price. In addition, as you can see from my above comments I do
EN> not see the current competition as healthy. Again, I can live with it if I
EN> have to, but since the issue is on the table I wanted to present to it.

EN> Now as to the priority of the various issues you mention, since we are just
EN> talking between friends, I would say:

EN> - transfers;
EN> - dropping all existing expired names;
EN> - dealing with technical issues at registry (as discussed in my previous
EN> note);
EN> - wls and all alternatives.

EN> So it seems we agree.

EN> Regards

EN> ----- Original Message -----
EN> From: "Don Brown" <donbrown_l@inetconcepts.net>
EN> To: <ga@dnso.org>
EN> Cc: <discuss-list@opensrs.org>; "Elliot Noss" <enoss@tucows.com>
EN> Sent: Wednesday, January 09, 2002 10:29 PM
EN> Subject: Re: [ga] Date: Wed, 9 Jan 2002 15:53:53 -0500

>> Elliot,
>> I, for one, appreciate your presentation of an objective view on, and
>> a potential resolution for, this issue. Much of the recent traffic on
>> this list has sunk to the personal level, which destroys the focus on
>> the issue and equally diminishes the opportunity for consensus and a
>> resolution.
>> The theory behind the WLS proposal, as I read it, was that it
>> addressed technical issues which could not otherwise be addressed on a
>> technical level. Your comments say, in contrast, that there is no
>> immediate technical problem with dropping deletions or, IOW that the
>> problem has been solved.
>> Since it is no longer broken and, therefore, does not demand a fix,
>> then I summize that the only motivation for a change in the business
>> model is for the Registry and certain Registrars to make additional
>> revenue from the secondary market, but in a structured and regulated
>> way.
>> Personally, I am not against anyone making a buck and I support free
>> enterprise, democracy and the entrepreneurial spirit. The premise is
>> that free enterprise spurs healthy competition, fosters R&D and
>> technological advances, drives down the price to the consumer and
>> expands the power and capabilities of humankind.  I support those
>> ideals and I believe in them.
>> Therefore, with all due respect to you and your noble intentions, with
>> respect to a workable resolution for this issue, I disagree with your
>> proposal for a least two reasons:
>> 1. There is no compelling reason to change anything, since, in
>> contrast to the premise behind the WLS proposal, there is nothing to
>> fix.
>> 2. There are already Registrars and others participating, in one
>> fashion or another, in the after-market.  The proposal would,
>> essentially, thwart healthy competition, since it regulates the price
>> and, therefore, service and innovation.
>> I do not mean the foregoing to convey the notion that I am resistive
>> to change.  In contrast, I remember when RAM was called CORE and I had
>> a PC before anyone ever called them by that name.  I am in favor of
>> "healthy" change, but I don't view any change with respect to the
>> after-market to be either healthy or warranted at this time.
>> There are several more elementary challenges which need to be solved
>> before a "moving forward" mind-set is warranted, in my view.  Some,
>> are, as follows:
>> 1. At least one Registrar admitted to a back room deal concerning the
>> registration of expired domain names during the 45 day period. I won't
>> mention the name out of respect, but it does tell me that there is the
>> potential for abuse currently in the system. I am told, but have
>> not read it for myself, that the ICANN contract is not clear on this
>> particular issue, since it speaks to ICANN's pertinent
>> regulations/procedures, but no such regulations/procedures currently
>> exist.
>> 2. There seems to be an abundance of complaints, which I have read on
>> other lists, about the Registry's (or it's brother/sister the Registrar)
>> concerning the hoarding of expired domain names.
>> 3. There are issues with respect to domain name transfers.  It seems
>> that some Registrars have departed from the main-stream and introduced
>> there own policies and procedures which depart from the ICANN
>> agreement.
>> So, with all due respect to you, Elliot, and the other poor souls who
>> have labored through this long post, I think we should fix the current
>> problems with the system first -- making those a priority over new
>> ventures (or adventures) into different markets.  IOW, I favor putting
>> the after-market on the "back-burner" for now and doing some much
>> needed house cleaning and maintenance.
>> Thanks,
>> Wednesday, January 09, 2002, 3:26:44 PM, Elliot Noss <enoss@tucows.com>
EN> wrote:
>> EN> I wanted to take a bit of a "clean-sheet" approach to this discussion
EN> as the
>> EN> points I wish to communicate cut across a number of different threads
EN> on a
>> EN> number of different lists.
>> EN> There are really four topics I wish to raise as follows:
>> EN> - Who has the "right" to deal with expired/expiring names?
>> EN> - The mixing in this discussion of two seperate issues, registry load
EN> and
>> EN> the allocation of expired/expiring names;
>> EN> - The inefficiency that results from any flat-price solution;
>> EN> - A way forward.
>> EN> Who has the "right" to expired/expiring names?
>> EN> -----------------------------------------------
>> EN> This is an issue that creates an interesting sub-text to this entire
>> EN> discussion, yet has not been fully examined. There are three potential
>> EN> claimants for this right and three possible states for these names.
>> EN> Claimants include registrants, registry and registrars. States include
>> EN> unexpired, expired in the grace period and expired o/s the grace
EN> period.
>> EN> There are two things that are clear. First, that no one party is
EN> clearly
>> EN> entitled to stake a claim. Registrars are limited by the terms of
EN> 3.7.5 of
>> EN> the RAA which require that names be put back in the pool if not
EN> renewed. The
>> EN> registry is limited by its role as monopoly technical supplier and by
EN> the
>> EN> Registry agreement which entitles it to a fee for the services it is
>> EN> contracted to perform and confers upon it no property rights beyond
EN> that.
>> EN> Registrants are limited by a number of practical issues including
EN> their
>> EN> limited rights in a name and their diffuse nature.
>> EN> What is clear to me is that this IS NOT a function of a registrars
EN> terms of
>> EN> service, nor is it an inherent right contained in the registry
EN> agreement.
>> EN> At the same time we must keep our eye on the fact that the role of
>> EN> registrars and registry is, most purely, to efficiently administer the
>> EN> allocation and provisioning of domain names. This means that the best
>> EN> approach is the one that puts names into the hands of those who would
EN> put
>> EN> them to the most use. Names in the hands of those who most desire them
EN> will
>> EN> lead to a fuller utilization of the Internet, more value for users and
EN> more
>> EN> revenue for registrars and registries.
>> EN> This point should not be seen as at odds with an egalitarian (as
EN> opposed to
>> EN> equitable) view of domain names and first-come-first-served ("FCFS"),
EN> but I
>> EN> realize this is a point that would be the subject of much debate. What
EN> is
>> EN> interesting today is that we are at a unique time and place in the
EN> history
>> EN> of the DNS which makes this less contentious. We have one extremely
EN> mature
>> EN> namespace in .com/.net/.org. It is almost certain to be the largest
>> EN> namespace throughout the lifecycle of the current DNS. It also has a
>> EN> secondary market that is more evolved than any other will ever be. We
EN> also
>> EN> have the recent introduction of new gTLDs that provide a fresh supply
EN> of
>> EN> names. This means any solution effected can be tailored to the current
>> EN> circumstance.
>> EN> We must also remember that there are two groups of registrants that we
EN> must
>> EN> consider, current registrants and potential registrants. They have
EN> distinct
>> EN> interests. Current registrants have rights around their existing
EN> names, both
>> EN> in terms of security from losing a name through inadvertance and in
EN> excess
>> EN> economic value. Potential registrants benefit from being able to
EN> efficiently
>> EN> obtain names that are currently owned. With the introduction of new
>> EN> potential registrants have, and will continue to have more and better
>> EN> alternatives. The maximum value in the secondary market exists right
EN> now,
>> EN> today.
>> EN> At the end of the day the competing claims of registries and
EN> registrars are
>> EN> likely subordinate to those of registrants. Accordingly, any solution
EN> should
>> EN> start with this underpinning.
>> EN> Registry load and the allocation of expired/expiring names
>> EN> -----------------------------------------------------------
>> EN> It has been noted by a number of people in this debate, and has been
EN> my
>> EN> position for many months, that the issues of registry load and the the
>> EN> allocation of expired/expiring names are being mixed together
EN> unnecessarily.
>> EN> I wish to add my voice to the chorus saying that these issues are
EN> related
>> EN> only remotely, almost accidentally. There have been a number of very
EN> good
>> EN> suggestions as to simple steps the registry could take to lessen the
EN> load.
>> EN> There are a couple additional points worth noting here. First, the
EN> current
>> EN> solution is no longer broken. While I am not a fan of the status quo,
EN> the
>> EN> registry has weathered the storm and there seems to currently be no
>> EN> appreciable impact on our day-to-day business (which was not the case
EN> a
>> EN> short time ago). An additional measure or two (a modified check
EN> command,
>> EN> additional, transparent compliance, all names dropping in real time
EN> and a
>> EN> published drop list are the easiest and most effective IMHO) would
EN> make this
>> EN> a non-issue.
>> EN> It is worth noting my personal dealings with the registry on the
EN> question of
>> EN> load have been positive and I was impressed with their genuine desire
EN> to
>> EN> solve the issues at hand.
>> EN> This last point leads me to feel comfortable that these issues are not
EN> being
>> EN> presented as being directly connected and can be dealt with
EN> seperately. I
>> EN> would, of course, love to hear Chuck confirm this.
>> EN> The Inefficiency of flat pricing
>> EN> ---------------------------------
>> EN> The current market for domain names is characterized by flat-priced
EN> supply
>> EN> and variable-priced demand. I do not take a politial position on this,
>> EN> merely note it as observation. This market inefficiency (again
EN> observation
>> EN> not position) has lead to the existance of a robust secondary market.
EN> It has
>> EN> also lead to a significant amount of the current CNO namespace sitting
>> EN> unused.
>> EN> I have strong reservations about any solution geared at the expiring
EN> market
>> EN> that magnifies that inefficiency. By definition it leaves money on the
EN> table
>> EN> and leaves demand unfulfilled at the same time. The worst of both
EN> worlds.
>> EN> Ideally we could find a solution that was able to create a robust,
EN> efficient
>> EN> secondary market which would benefit registrars and the registry, but
EN> if
>> EN> done properly would most benefit registrants.
>> EN> A suggested way forward
>> EN> ------------------------
>> EN> Unfortunately, for me, the existing WLS proposal is not acceptable.
EN> The
>> EN> inefficiencies are large and the economics are miles away from either
EN> fair
>> EN> or realistic. With significantly re-worked economics it could be an
>> EN> acceptable interim step, but I am not sure we need an interim step,
>> EN> especially given the decoupling of the registry load issue.
>> EN> It seems to me there is a way forward that addresses all of the above
>> EN> issues. I would suggest two important modifications to the existing
EN> Peter
>> EN> Girard proposal. An unlimited bidding period and the bulk of the fees
EN> going
>> EN> to existing registrants rather than registrars.
>> EN> All names should be available to "bid" on at any time. A "bid" by a
>> EN> prospective registrant would require an administrative fee collected
EN> by a
>> EN> registrar, shared with registry and would be available for acceptance
EN> by the
>> EN> existing registrant at any time. A sucessful transaction would lead to
EN> a fee
>> EN> to both registry and registrars. An example:
>> EN> - Potential registrant places a bid of $150 on abcd.com and for doing
EN> so
>> EN> pays a non-refundable administrative fee to registrar x of $10 and in
EN> turn
>> EN> registrar pays registry $5;
>> EN> - Original registrant is made aware of his ability to "transfer" the
EN> name
>> EN> and any unexpired term to a potential registrant for $120;
>> EN> - If original registrant decides to accept he contacts the existing
>> EN> registrar of record and informs him of his desire;
>> EN> - If the registrars are different the $30 transaction fee is split 1/3
EN> each,
>> EN> if the same than the split is equal between registrar and registry;
>> EN> - The fee would be a % of bid, capped at a relatively low number
EN> ($30?).
>> EN> To be clear, this is described in very brief terms and would need
>> EN> significant rounding out as well as a champion so please work the
EN> principals
>> EN> not the specifics.
>> EN> This solution would provide significant benefits to everyone involved
EN> in
>> EN> both an equitable and palatable fashion. It would also keep both
EN> registrars
>> EN> and registries in their role of market makers not market participants
EN> and
>> EN> would create a level of efficiency that would lead to increased
EN> revenues,
>> EN> increased registrant satisfaction and, perhaps most importantly,
EN> maximized
>> EN> use of the namespace.
>> EN> The original administrative fee would/should act so as to deter nearly
EN> all
>> EN> wasteful behaviour. Technically, it need be no more complicated than
EN> an
>> EN> interface between the SRS and EBay's open APIs (full credit here to
EN> Joyce
>> EN> Lin in Montevideo, if only we would have listened to you then!). It
EN> could be
>> EN> completely done by the registry, by the registry with technical
EN> partners,
>> EN> Peter could do it, or it could be put out to a completely new tender
>> EN> process. I know we would love to build it (but to be clear we are not
>> EN> throwing our hat in the ring whatsoever). I know perhaps fifty people
>> EN> reading this message would love to build it. That kind of excites me,
>> EN> thinking of all of the extremely capable people who could nail this
>> EN> technically. Innovation would abound if we let it.
>> EN> The single largest beneficiary would be the registry. Ok by me. The
EN> largest
>> EN> cumulative benefit would accrue to registrants. Again, that works for
EN> me. I
>> EN> think this would be an absolutely elegant outcome for everyone.
>> EN> Regards
>> EN> Elliot Noss
>> EN> Tucows inc.
>> EN> 416-538-5494
>> EN> --
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>> ----
>> Don Brown - Dallas, Texas USA     Internet Concepts, Inc.
>> donbrown_l@inetconcepts.net         http://www.inetconcepts.net
>> PGP Key ID: 04C99A55              (972) 788-2364  Fax: (972) 788-5049
>> Providing Internet Solutions Worldwide - An eDataWeb Affiliate
>> ----

Don Brown - Dallas, Texas USA     Internet Concepts, Inc.
donbrown_l@inetconcepts.net         http://www.inetconcepts.net
PGP Key ID: 04C99A55              (972) 788-2364  Fax: (972) 788-5049
Providing Internet Solutions Worldwide - An eDataWeb Affiliate

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